On Friday, March 18, 2011, FINRA issued Regulatory Notice 11-12 entitled "FINRA Reminds Firms of Their Obligations Under the Foreign Corrupt Practices Act" (available here). The Notice, which provides a brief review of the FCPA, discusses the application of the Act’s prohibitions to member firms.
As stated in the Notice, the FCPA not only makes it "unlawful to bribe foreign officials to obtain or retain business in a foreign country," but "[t]he accounting provisions generally require each company considered to be an ‘issuer’ under the FCPA to make and keep books and records that accurately and fairly reflect the company’s transactions and to devise and maintain an adequate system of internal accounting controls."
The Notice advises firms "to review their business practices to ensure they are complying with all of their obligations under the FCPA." The Notice further warns that a "member firm’s failure to comply with its FCPA obligations will be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade)."
FINRA’s Notice is just the latest statement reflecting the increased focus on FCPA enforcement. In remarks made in November 2010 (available here), Assistant Attorney General Lanny A. Breuer stated that firms had a "right to be more concerned," because "we are in a new era of FCPA enforcement; and we are here to stay." Last week, Mark Mendelsohn, the former Deputy Chief of the Fraud Section at DOJ, in an interview with the Wall Street Journal (discussed here) warned that the "rise in prosecutions of individuals … is a trend that is here to stay and will continue to grow."